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Informist, Thursday, May 15, 2025

 

MUMBAI – The International Energy Agency expects growth in global crude oil demand to fall to 650,000 barrels per day for the remainder of 2025 because of economic headwinds and record sales of electric vehicles. It had expected global oil demand to grow by 990,000 barrels per day in the first quarter of 2025.

 

The Paris-based autonomous intergovernmental organisation expects growth in oil demand to average 740,000 barrels per day in 2025, higher than the 730,000 barrels per day projected last month. In 2026, it expects growth in oil demand to average 760,000 barrels per day.

 

Benchmark crude oil prices have fallen by around $10 per barrel since April due to US' tariff war and larger-than-expected production hikes by the Organization of the Petroleum Exporting Countries and its allies. Although the bearish market sentiment has somewhat eased after the US agreed on a trade deal with the UK and a 90-day accord with China, "...increased trade uncertainty is expected to weigh on the world economy and, by extension, oil demand," the energy watchdog said in its oil market report for May.

 

Global oil supply is expected to rise by 1.6 million barrels per day to 104.6 million barrels per day on average in 2025. In 2026, oil supply could rise by an additional 970,000 barrels per day, according to the report. Last month, the agency had projected growth in oil supply at 1.2 million barrels per day for 2025 and 960,000 barrels a day for 2026.

 

OPEC and its allies are projected to add 310,000 barrels per day of extra supply this year and 150,000 barrels per day in 2026, the agency said. Earlier this month, eight member nations of OPEC and its allies agreed to increase production for the second consecutive month starting June. However, the IEA said the actual increase in output will be lower as a number of countries including Kazakhstan, the United Arab Emirates, Iraq, and Russia continue to produce above their targets.

 

Nations outside OPEC and allies are expected to raise supply by 1.3 million barrels per day this year and 820,000 barrels per day in 2026. Global oil stocks rose by 25.1 million barrels in March to 7.67 billion barrels but remained well below the five-year average. Preliminary data show global oil inventories built further in April, the agency said.

 

"Refinery throughput forecasts for 2025 and 2026 are broadly unchanged from last month's report at 83.2 million barrels per day and 83.6 million barrels per day, respectively. Refining margins reached 12-month highs across most regions and configurations in late April, as a discernible shift in crude pricing boosted profitability," it added.

 

At 1600 IST, the price of West Texas Intermediate crude oil was $60.86 per barrel, down 3.6% from Wednesday. Price of Brent Crude on the Intercontinental Exchange was $63.84 per barrel, down 3.4% from the previous close.  End

 

US$1 = INR 85.55

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Ashutosh Pati

Edited by Ashish Shirke

 

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